DoD to scrutinize GSA prices

Apr. 11, 2014 - 06:00AM
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Richard Ginman, Deputy Director, Contingency Contracting and Acquisition Policy at DoD, is concerned that Defense often gets higher prices through the GSA schedules than do other buyers. (Staff)

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The General Services Administration promotes its supply schedules as offering federal agencies the lowest prices for commercial products and services.

But a growing concern of the Defense Department — one of GSA’s largest customers — is DoD doesn’t always get the best deals on GSA schedules. There is wide variation in schedule pricing, but the government’s acquisition regulations tell contracting staff those prices are fair and reasonable, said Richard Ginman, director of Defense Procurement and Acquisition Policy, DoD’s contracting policy arm.

“What the [Federal Acquisition Regulation] said was the price has been determined to be fair and reasonable, you need to know no further documentation, you need to do no analysis,” Ginman said.

Ginman issued a DoD policy dated March 13 that requires contracting officers to determine whether GSA’s prices are in fact fair and reasonable. The policy, also known as a class deviation, will remain in effect until it is incorporated into DoD’s acquisition regulations or rescinded.

Jeffrey Koses, GSA’s senior procurement executive, said the agency is working to address the variable pricing on its schedules and has taken several steps to lower prices.

“We recognize that too much price variability is a very real concern, and we do think we own responsibility to address and to narrow the degree of price variability, but we also want to work together to keep schedules effective and easy to use,” Koses said.

There are thousands of examples where DoD is paying more for certain products, including office supplies, than other buyers. For any number of items on GSA’s office supply schedule, DoD paid the highest price 15 percent of the time, Ginman said at The Coalition for Government Procurement’s April 10 training conference. The difference in cost for the lowest and highest priced item ranged from 70 to 100 percent.

“As taxpayers, do you want me to pay 31 bucks for that stapler or would you rather I paid five?” Ginman said. And “how can the same stapler costing 31 bucks be considered fair and reasonable? I took that option off the table for my contracting officers.”

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The decision has no doubt ruffled some feathers within the contracting community and morphed into a topic of debate.

One conference attendee told Ginman “it’s not that simple of a deal.” Contracting officers should do their research, not just assume they are getting the best deal because it’s the cheapest item, he said.

“DPAP’s concern is understandable,” Roger Waldron, a former GSA official and president of The Coalition for Government Procurement,” wrote in a Federal Times blog post. “Some due diligence by the contracting officer is appropriate to ensure that the government is getting a fair deal at the task order level under multiple award contracts, including the GSA Schedules. At the same time, a balance should be struck recognizing that one of the important benefits of multiple award contracts is the streamlined task order competition process—a process mandated by statute and regulation.”

The GSA schedule purchases in question are mainly dealing with purchases below $3,000, Ginman said. Purchases over $3,000 require buyers to consider at least three options, so hopefully competition is driving contracting officers to the best price.

While the FAR encourages contracting officers to ask for discounts, when someone is pressed for time “and the book says you don’t need to do it, they don’t,” he said.